Market Overview

Cascades Announces a Continuation of Solid Results for the First Quarter of 2020

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Navigating the Covid-19 pandemic by providing our customers essential products while ensuring the health and safety of our employees

KINGSEY FALLS, QC, May 7, 2020 /CNW Telbec/ - Cascades Inc. (TSX:CAS) reports its unaudited financial results for the three-month period ended March 31, 2020.

Q1 2020 Highlights

  • Sales of $1,313 million
    (compared with $1,227 million in Q4 2019 (+7%) and $1,230 million in Q1 2019 (+7%))
  • As reported (including specific items)
    • Operating income of $90 million
      (compared with an operating loss of $1 million in Q4 2019 and an operating income of $72 million in Q1 2019 (+25%))
    • Operating income before depreciation and amortization (OIBD)1 of $161 million
      (compared with $76 million in Q4 2019 (+112%) and $139 million in Q1 2019 (+16%))
    • Net earnings per share of $0.24
      (compared with net loss per share of $0.27 in Q4 2019 and net earnings per share of $0.26 in Q1 2019)
  • Adjusted (excluding specific items)1
    • Operating income of $90 million
      (compared with $75 million in Q4 2019 (+20%) and $68 million in Q1 2019 (+32%))
    • OIBD of $161 million
      (compared with $152 million in Q4 2019 (+6%) and $135 million in Q1 2019 (+19%))
    • Net earnings per share of $0.42
      (compared with $0.30 in Q4 2019 and $0.14 in Q1 2019)
  • Exercised option to acquire the Caisse de dépôt et placement du Québec's ("CDPQ") 20.2% interest in the Greenpac Mill, increasing the Corporation's ownership to 86.3%; Transaction was settled January 3, 2020 for a total purchase price of $121 million.
  • Net debt1 of $2,212 million as at March 31, 2020 (compared with $1,963 million as at December 31, 2019) reflecting FX impact ($140 million) and the acquisition of CDPQ's interest in Greenpac Mill ($121 million); Net debt to adjusted OIBD ratio1 at 3.5x.

1 For further details, please refer to the "Supplemental Information on non-IFRS Measures" section.

Mr. Mario Plourde, President and Chief Executive Officer, commented: "Our first quarter results are a testament to the dedication and hard work of every one of our employees during these challenging times. We are very proud of their commitment to support our customers and communities by ensuring that our facilities meet the heightened demand for the essential tissue and packaging products we produce. Within this difficult context, first quarter sales increased 7% from the prior quarter. This reflected improvements in all business segments, most notably in Tissue, European Boxboard and specific Specialty Packaging products as a result of consumer buying patterns related to Covid-19 and strategic actions taken in recent quarters. Sales growth of 7% year-over-year was largely driven by increases in Tissue, which benefited from higher volumes and favourable average selling price, sales mix and exchange rate. Containerboard sales also increased year-over-year, as higher volumes and a beneficial exchange rate offset the impacts from a less favourable sales mix and lower average selling price. Sales in European Boxboard decreased slightly year-over-year largely due to lower average selling prices, while lower sales in Specialty Products reflect a business divestiture and mill closure in 2019.  

First quarter adjusted OIBD of $161 million, which is net of a $10 million expected credit loss provision taken against accounts receivable amounts across our business segments, increased 6% sequentially and 19% compared to the prior year period. The sequential performance was driven by improved results in Tissue that reflected volume growth combined with a higher average selling price. Stronger sequential performances from the European Boxboard and Specialty Packaging segments also benefited from volume growth. European Boxboard results also reflected lower raw material pricing and lower average selling prices, while the reverse was true for Specialty Packaging. The year-over-year growth was entirely attributable to the improved performance in the Tissue segment.

Discussing near-term outlook, Mr. Plourde commented, "At this time we expect second quarter performance to be the result of a combination of tailwinds and headwinds in our different business segments. Specifically, Tissue results will reflect elevated raw material prices due to higher white recycled grade fibre costs and a greater use of virgin pulp due to lower levels of available recycled material. Containerboard margins are also expected to be impacted by higher OCC prices. Volumes in both Tissue and Containerboard are also forecasted to slow sequentially following an easing of the Covid-19 related pantry stocking trends seen in the first quarter and lower demand levels following business closures. Near-term Specialty Product performance is expected to reflect stronger consumer packaging trends, the effects of which should offset softness in industrial packaging. Boxboard Europe results are expected to increase slightly, supported by steady demand and announced industry price increases.

Our priority is the health and safety of our employees, ensuring the continuity of our production to meet the needs of our customers, supporting community initiatives and working in partnership with customers impacted by the current business environment. We will remain vigilant in our cash flow management, and expect our projected available liquidity levels to meet future requirements. We will adjust investment plans further should they be required while continuing to manage our debt level. Given the uncertainty regarding the potential impact from the Covid-19 pandemic over the coming months, we are focused on prudent cash flow management, and have therefore reduced planned capital expenditures to a range of $175 to $200 million for the year, down from $250 million previously, but are maintaining our current dividend policy. Analysis of our Bear Island conversion project has continued at a slower pace given current circumstances, and as such we will not be providing any updated specifics or schedule at this time."

Financial Summary

Selected consolidated information





(in millions of Canadian dollars, except amounts per share) (unaudited)

Q1 2020

Q4 2019

Q1 2019





Sales

1,313

1,227

1,230

As Reported




Operating income before depreciation and amortization (OIBD)1

161

76

139

Operating income (loss)

90

(1)

72

Net earnings (loss)

22

(26)

24

per share

$

0.24

$

(0.27)

$

0.26

Adjusted1




Operating income before depreciation and amortization (OIBD)

161

152

135

Operating income

90

75

68

Net earnings

39

29

13

per share

$

0.42

$

0.30

0.14

Margin (OIBD)

12.3%

12.4%

11.0%

1 - Refer to the "Supplemental Information on Non-IFRS Measures" section.




 

Segmented OIBD as reported





(in millions of Canadian dollars) (unaudited)

Q1 2020

Q4 2019

Q1 2019





Packaging Products




Containerboard

102

98

111

Boxboard Europe

31

8

29

Specialty Products

11

9

13





Tissue Papers

45

(3)

4





Corporate Activities

(28)

(36)

(18)

Operating income (loss) as reported

161

76

139









Segmented adjusted OIBD1








(in millions of Canadian dollars) (unaudited)

Q1 2020

Q4 2019

Q1 2019





Packaging Products




Containerboard

99

106

104

Boxboard Europe

30

24

29

Specialty Products

12

9

14





Tissue Papers

45

35

9





Corporate Activities

(25)

(22)

(21)

Adjusted OIBD

161

152

135

1 - Refer to the "Supplemental Information on Non-IFRS Measures" section.




Analysis of results for the three-month period ended March 31, 2020 (compared to the same period last year)

Sales of $1,313 million grew by $83 million, or 7%, compared with the same period last year. This reflected increases in all segments with the exception of Specialty Products, but was largely driven by the Tissue segment, where sales grew $98 million, or 28%, compared to the prior year. Specifically, sales in the Tissue segment reflected increased consumer demand in light of Covid-19, higher average selling price, more favourable sales mix and foreign exchange impact, and the addition of Orchids assets in the second half of 2019. European Boxboard sales decreased by $7 million, or 3%, compared with the previous year. This was largely driven by lower average selling prices in both recycled and virgin boxboard and a less favourable Canadian dollar - euro exchange rate, the effects of which were partially offset by higher volumes. Sales in the Specialty Products segment decreased 12% or $16 million year-over-year, reflecting the divestiture of the European activities and closure of the felt vinyl backing mill during the second half of 2019, the impacts of which outweighed the benefits from higher volume in Consumer packaging and favourable exchange rate. Lastly, sales in the Containerboard Packaging group increased by 4% or $17 million year-over-year, due primarily to higher volume and, to a lesser extent, by a more favourable exchange rate. These benefits were partially offset by a lower average selling price and less favourable sales mix year-over-year.

The Corporation generated an operating income before depreciation and amortization (OIBD) of $161 million in the first quarter of 2020, which is net of a $10 million expected credit loss provision taken on accounts receivable amounts across the Corporation's business segments in relation to the current uncertainty caused by the pandemic. This compares with the $139 million generated in the same period last year, an increase of $22 million. The annual improvement was driven by the Tissue segment, where results benefited from lower raw material prices, volume gains, and more favourable average selling price and sales mix. European Boxboard results also improved slightly year-over-year, as benefits from lower raw material costs and higher volumes offset the impacts from lower average selling prices and higher production costs. The decrease in Containerboard results reflect a lower average selling price, higher operational and freight costs and less favourable sales mix, the effects of which mitigated the benefit from lower raw material costs. Specialty Products performance reflect higher operating and maintenance costs, partially offset by volume gains and improved realized spreads in some sub-sectors.

On an adjusted basis1, first quarter 2020 OIBD stood at $161 million, versus $135 million in the previous year.  The main specific items, before income taxes, that impacted our first quarter 2020 OIBD and/or net earnings were:

  • $1 million charge related to an environmental provision for a Specialty Products plant in Québec that was closed in a prior year (OIBD and net earnings)
  • $1 million unrealized gain on financial instruments (OIBD and net earnings)
  • $17 million foreign exchange loss on long-term debt and financial instruments (net earnings)

For the 3-month period ended March 31, 2020, the Corporation posted net earnings of $22 million, or $0.24 per share, compared to net earnings of $24 million, or $0.26 per share, in the same period of 2019. On an adjusted basis1, the Corporation generated net earnings of $39 million in the first quarter of 2020, or $0.42 per share, compared to net earnings of $13 million, or $0.14 per share, in the same period of 2019.

1   For further details, please refer to the "Supplemental Information on non-IFRS Measures" section.

Dividend on common shares and normal course issuer bid

The Board of Directors of Cascades declared a quarterly dividend of $0.08 per share to be paid on June 4, 2020 to shareholders of record at the close of business on May 21, 2020. This dividend is an "eligible dividend" as per the Income Tax Act (R.C.S. (1985), Canada). During the first quarter of 2020, Cascades purchased 445,354 shares for cancellation at a weighted average price of $11.53.

2020 First Quarter Results Conference Call Details

Management will discuss the 2020 first quarter financial results during a conference call today at 9:00 a.m. EDT. The call can be accessed by dialing 1-888-231-8191 (international dial-in 1-647-427-7450). The conference call, including the investor presentation, will be broadcast live on the Cascades website (www.cascades.com under the "Investors" section). A replay of the call will be available on the Cascades website and may also be accessed by phone until June 9, 2020 by dialing 1-855-859-2056 (international dial-in 1-416-849-0833), access code 7475335.

Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs 11,000 women and men across a network of over 90 facilities in North America and Europe. Driven by its participative management, half a century of experience in recycling, and continuous research and development efforts, Cascades continues to provide innovative products that customers have come to rely on, while contributing to the well-being of people, communities and the entire planet. Cascades' shares trade on the Toronto Stock Exchange under the ticker symbol CAS. Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Corporation's products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Corporation's Securities and Exchange Commission filings.

CONSOLIDATED BALANCE SHEETS




(in millions of Canadian dollars) (unaudited)

March 31,
2020

December 31,
2019

Assets



Current assets



Cash and cash equivalents

153

155

Accounts receivable

733

606

Current income tax assets

22

32

Inventories

606

598

Current portion of financial assets

11

10


1,525

1,401

Long-term assets



Investments in associates and joint ventures

86

80

Property, plant and equipment

2,904

2,770

Intangible assets with finite useful life

180

182

Financial assets

31

16

Other assets

52

55

Deferred income tax assets

150

153

Goodwill and other intangible assets with indefinite useful life

549

527


5,477

5,184

Liabilities and Equity



Current liabilities



Bank loans and advances

9

11

Trade and other payables

846

788

Current income tax liabilities

21

17

Current portion of long-term debt

92

85

Current portion of provisions for contingencies and charges

4

5

Current portion of financial liabilities and other liabilities

32

137


1,004

1,043

Long-term liabilities



Long-term debt

2,264

2,022

Provisions for contingencies and charges

53

49

Financial liabilities

14

5

Other liabilities

190

198

Deferred income tax liabilities

213

198


3,738

3,515

Equity



Capital stock

492

491

Contributed surplus

14

15

Retained earnings

1,023

1,003

Accumulated other comprehensive income (loss)

13

(17)

Equity attributable to Shareholders

1,542

1,492

Non-controlling interests

197

177

Total equity

1,739

1,669


5,477

5,184





CONSOLIDATED STATEMENTS OF EARNINGS




For the 3-month periods
ended March 31,

(in millions of Canadian dollars, except per common share amounts and number of common shares) (unaudited)

2020

2019

Sales

1,313

1,230

Cost of sales and expenses



Cost of sales (including depreciation and amortization of $71 million (2019 — $67 million))

1,092

1,058

Selling and administrative expenses

131

104

Loss (gain) on acquisitions, disposals and others

1

(10)

Impairment charges and restructuring costs

9

Gain on derivative financial instruments

(1)

(3)


1,223

1,158

Operating income

90

72

Financing expense

27

25

Interest expense on employee future benefits and other liabilities

1

14

Foreign exchange loss (gain) on long-term debt and financial instruments

17

(6)

Share of results of associates and joint ventures

(3)

(2)

Earnings before income taxes

48

41

Provision for income taxes

15

8

Net earnings including non-controlling interests for the period

33

33

Net earnings attributable to non-controlling interests

11

9

Net earnings attributable to Shareholders for the period

22

24

Net earnings per common share



Basic

$

0.24

$

0.26

Diluted

$

0.23

$

0.26

Weighted average basic number of common shares outstanding

94,248,804

94,166,959

Weighted average number of diluted common shares

95,523,990

95,736,437





CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME




For the 3-month periods
ended March 31,

(in millions of Canadian dollars) (unaudited)

2020

2019

Net earnings including non-controlling interests for the period

33

33

Other comprehensive income (loss)



Items that may be reclassified subsequently to earnings



Translation adjustments



Change in foreign currency translation of foreign subsidiaries

102

(37)

Change in foreign currency translation related to net investment hedging activities

(59)

21

Cash flow hedges



Change in fair value of foreign exchange forward contracts

1

Change in fair value of interest rate swaps

(1)

Change in fair value of commodity derivative financial instruments

(1)


42

(16)

Items that are not released to earnings



Actuarial gain (loss) on employee future benefits

10

(5)

Recovery (provision) of income taxes

(3)

2


7

(3)

Other comprehensive income (loss)

49

(19)

Comprehensive income including non-controlling interests for the period

82

14

Comprehensive income attributable to non-controlling interests for the period

23

2

Comprehensive income attributable to Shareholders for the period

59

12

 

CONSOLIDATED STATEMENTS OF EQUITY




For the 3-month period ended March 31, 2020

(in millions of Canadian dollars) (unaudited)

CAPITAL STOCK

CONTRIBUTED SURPLUS

RETAINED EARNINGS

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS

NON-CONTROLLING INTERESTS

TOTAL EQUITY

Balance - End of previous period, as reported

491

15

1,000

(17)

1,489

177

1,666

Business combinations

3

3

3

Adjusted balance - Beginning of period

491

15

1,003

(17)

1,492

177

1,669

Comprehensive income








Net earnings

22

22

11

33

Other comprehensive income

7

30

37

12

49


29

30

59

23

82

Dividends

(7)

(7)

(3)

(10)

Issuance of common shares upon exercise of stock options

4

(1)

3

3

Redemption of common shares

(3)

(2)

(5)

(5)

Balance - End of period

492

14

1,023

13

1,542

197

1,739










For the 3-month period ended March 31, 2019

(in millions of Canadian dollars) (unaudited)

CAPITAL STOCK

CONTRIBUTED SURPLUS

RETAINED EARNINGS

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS

NON-CONTROLLING INTERESTS

TOTAL EQUITY

Adjusted balance - Beginning of period

490

16

989

2

1,497

180

1,677

Comprehensive income (loss)








Net earnings

24

24

9

33

Other comprehensive loss

(3)

(9)

(12)

(7)

(19)


21

(9)

12

2

14

Dividends

(4)

(4)

(4)

(8)

Redemption of common shares

(3)

(2)

(5)

(5)

Balance - End of period

487

16

1,004

(7)

1,500

178

1,678

 

CONSOLIDATED STATEMENTS OF CASH FLOWS




For the 3-month periods ended March 31,

(in millions of Canadian dollars) (unaudited)

2020

2019

Operating activities



Net earnings attributable to Shareholders for the period

22

24

Adjustments for:



Financing expense and interest expense on employee future benefits and other liabilities

28

39

Depreciation and amortization

71

67

Loss (gain) on acquisitions, disposals and others

1

(9)

Impairment charges and restructuring costs

5

Unrealized loss (gain) on derivative financial instruments

(1)

(3)

Foreign exchange loss (gain) on long-term debt and financial instruments

17

(6)

Provision for income taxes

15

8

Share of results of associates and joint ventures

(3)

(2)

Net earnings attributable to non-controlling interests

11

9

Net financing expense paid

(17)

(43)

Net income taxes received

9

Employee future benefits and others

(7)


153

82

Changes in non-cash working capital components

(34)

(30)


119

52

Investing activities



Payments for property, plant and equipment

(74)

(66)

Proceeds from disposals of property, plant and equipment

1

1

Change in intangible and other assets

(2)

(1)


(75)

(66)

Financing activities



Bank loans and advances

(2)

2

Change in credit facilities

97

64

Payments of other long-term debt

(20)

(41)

Issuance of common shares upon exercise of stock options

3

Redemption of common shares

(5)

(5)

Payment of other liabilities

(121)

Dividends paid to non-controlling interests

(3)

(4)

Dividends paid to the Corporation's Shareholders

(7)

(4)


(58)

12

Change in cash and cash equivalents during the period

(14)

(2)

Currency translation on cash and cash equivalents

12

(4)

Cash and cash equivalents - Beginning of the period

155

123

Cash and cash equivalents - End of the period

153

117

SEGMENTED INFORMATION

The Corporation analyzes the performance of its operating segments based on their operating income before depreciation and amortization, which is not a measure of performance under International Financial Reporting Standards (IFRS); however, the chief operating decision-maker (CODM) uses this performance measure to assess the operating performance of each reportable segment. Earnings for each segment are prepared on the same basis as those of the Corporation. Intersegment operations are recorded on the same basis as sales to third parties, which are at fair market value. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in its most recent audited consolidated financial statements for the year ended December 31, 2019.

The Corporation's operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The Chief Executive Officer has authority for resource allocation and management of the Corporation's performance, and is therefore the CODM.

The Corporation's operations are managed in four segments: Containerboard, Boxboard Europe and Specialty Products (which constitutes the Corporation's Packaging Products), and Tissue Papers.


SALES


For the 3-month periods
ended March 31,

(in millions of Canadian dollars) (unaudited)

2020

2019

Packaging Products



Containerboard

458

441

Boxboard Europe

272

279

Specialty Products

113

129

Intersegment sales

(3)

(4)


840

845

Tissue Papers

446

348

Intersegment sales and Corporate Activities

27

37


1,313

1,230






OPERATING INCOME BEFORE
DEPRECIATION AND AMORTIZATION


For the 3-month periods
ended March 31,

(in millions of Canadian dollars) (unaudited)

2020

2019

Packaging Products



Containerboard

102

111

Boxboard Europe

31

29

Specialty Products

11

13


144

153

Tissue Papers

45

4

Corporate Activities

(28)

(18)

Operating income before depreciation and amortization

161

139

Depreciation and amortization

(71)

(67)

Financing expense and interest expense on employee future benefits and other liabilities

(28)

(39)

Foreign exchange gain (loss) on long-term debt and financial instruments

(17)

6

Share of results of associates and joint ventures

3

2

Earnings before income taxes

48

41






PAYMENTS FOR PROPERTY, PLANT AND
EQUIPMENT


For the 3-month periods
ended March 31,

(in millions of Canadian dollars) (unaudited)

2020

2019

Packaging Products


Containerboard

16

22

Boxboard Europe

5

11

Specialty Products

5

3


26

36

Tissue Papers

24

29

Corporate Activities

6

11

Total acquisitions

56

76

Proceeds from disposals of property, plant and equipment

(1)

(1)

Right-of-use assets and included in other debts

(9)

(15)


46

60

Acquisitions for property, plant and equipment included in "Trade and other payables"


Beginning of period

46

37

End of period

(19)

(32)

Payments for property, plant and equipment net of proceeds from disposals

73

65

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

SPECIFIC ITEMS

The Corporation incurs some specific items that adversely or positively affect its operating results. We believe it is useful for readers to be aware of these items, as they provide additional information to measure performance, compare the Corporation's results between periods, and assess operating results and liquidity, notwithstanding these specific items. Management believes these specific items are not necessarily reflective of the Corporation's underlying business operations in measuring and comparing its performance and analyzing future trends. Our definition of specific items may differ from those of other corporations, and some of them may arise in the future and may reduce the Corporation's available cash.

They include, but are not limited to, charges for (reversals of) impairment of assets, restructuring gains or costs, loss on refinancing and repurchase of long-term debt, some deferred tax asset provisions or reversals, premiums paid on long-term debt refinancing, gains or losses on the acquisition or sale of a business unit, gains or losses on the share of results of associates and joint ventures, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps, foreign exchange gains or losses on long-term debt and financial instruments, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.

RECONCILIATION OF NON-IFRS MEASURES

To provide more information for evaluating the Corporation's performance, the financial information included in this analysis contains certain data that are not performance measures under IFRS ("non-IFRS measures"), which are also calculated on an adjusted basis to exclude specific items. We believe that providing certain key performance measures and non-IFRS measures is useful to both Management and investors, as they provide additional information to measure the performance and financial position of the Corporation. This also increases the transparency and clarity of the financial information. The following non-IFRS measures are used in our financial disclosures:

  • Operating income before depreciation and amortization (OIBD): Used to assess operating performance and the contribution of each segment when excluding depreciation and amortization. OIBD is widely used by investors as a measure of a corporation's ability to incur and service debt and as an evaluation metric.
  • Adjusted OIBD: Used to assess operating performance and the contribution of each segment on a comparable basis.
  • Adjusted operating income: Used to assess operating performance of each segment on a comparable basis.
  • Adjusted net earnings: Used to assess the Corporation's consolidated financial performance on a comparable basis.
  • Adjusted free cash flow: Used to assess the Corporation's capacity to generate cash flows to meet financial obligations and/or discretionary items such as share repurchase, dividend increase and strategic investments.
  • Net debt to adjusted OIBD ratio: Used to measure the Corporation's credit performance and evaluate financial leverage.
  • Net debt to adjusted OIBD ratio on a pro-forma basis: Used to measure the Corporation's credit performance and evaluate the financial leverage on a comparable basis, including significant business acquisitions and excluding significant business disposals, if any.

Non-IFRS measures are mainly derived from the consolidated financial statements, but do not have meanings prescribed by IFRS. These measures have limitations as an analytical tool and should not be considered on their own or as a substitute for an analysis of our results as reported under IFRS. In addition, our definitions of non-IFRS measures may differ from those of other corporations. Any such modification or reformulation may be significant.

The reconciliation of operating income (loss) to OIBD, to adjusted operating income (loss) and to adjusted OIBD by business segment is as follows:


Q1 2020

(in millions of Canadian dollars) (unaudited)

Containerboard

Boxboard Europe

Specialty Products

Tissue Papers

Corporate Activities

Consolidated

Operating income (loss)

74

20

8

28

(40)

90

Depreciation and amortization

28

11

3

17

12

71

Operating income (loss) before depreciation and amortization

102

31

11

45

(28)

161

Specific items:







Loss on acquisitions, disposals and others

1

1

Unrealized loss (gain) on financial instruments

(3)

(1)

3

(1)


(3)

(1)

1

3

Adjusted operating income (loss) before depreciation and amortization

99

30

12

45

(25)

161

Adjusted operating income (loss)

71

19

9

28

(37)

90






Q4 2019

(in millions of Canadian dollars) (unaudited)

Containerboard

Boxboard Europe

Specialty Products

Tissue Papers

Corporate Activities

Consolidated

Operating income (loss)

69

(6)

5

(21)

(48)

(1)

Depreciation and amortization

29

14

4

18

12

77

Operating income (loss) before depreciation and amortization

98

8

9

(3)

(36)

76

Specific items :







Loss on acquisitions, disposals and others

4

1

5

Inventory adjustment resulting from business acquisition

2

2

Impairment charges

2

14

34

14

64

Restructuring costs

1

2

3

Unrealized loss (gain) on derivative financial instruments

1

2

(1)

2


8

16

38

14

76

Adjusted operating income (loss) before depreciation and amortization

106

24

9

35

(22)

152

Adjusted operating income (loss)

77

10

5

17

(34)

75






Q1 2019

(in millions of Canadian dollars) (unaudited)

Containerboard

Boxboard Europe

Specialty Products

Tissue Papers

Corporate Activities

Consolidated

Operating income (loss)

84

18

9

(8)

(31)

72

Depreciation and amortization

27

11

4

12

13

67

Operating income (loss) before depreciation and amortization

111

29

13

4

(18)

139

Specific items:







Gain on acquisitions, disposals and others

(10)

(10)

Impairment charges

3

1

4

Restructuring costs

1

4

5

Unrealized gain on financial instruments

(3)

(3)


(7)

1

5

(3)

(4)

Adjusted operating income (loss) before depreciation and amortization

104

29

14

9

(21)

135

Adjusted operating income (loss)

77

18

10

(3)

(34)

68

Net earnings (loss), as per IFRS, is reconciled below with operating income (loss), adjusted operating income and adjusted operating income before depreciation and amortization:



(in millions of Canadian dollars) (unaudited)

Q1 2020

Q4 2019

Q1 2019





Net earnings (loss) attributable to Shareholders for the period

22

(26)

24

Net earnings attributable to non-controlling interests

11

3

9

Provision for (recovery of) income taxes

15

(11)

8

Share of results of associates and joint ventures

(3)

(3)

(2)

Foreign exchange loss (gain) on long-term debt and financial instruments

17

1

(6)

Financing expense and interest expense on employee future benefits and other liabilities

28

35

39

Operating income (loss)

90

(1)

72

Specific items:




Loss (gain) on acquisitions, disposals and others

1

5

(10)

Inventory adjustment resulting from business acquisition

2

Impairment charges

64

4

Restructuring costs

3

5

Unrealized loss (gain) on derivative financial instruments

(1)

2

(3)


76

(4)

Adjusted operating income

90

75

68

Depreciation and amortization

71

77

67

Adjusted operating income before depreciation and amortization

161

152

135

The following table reconciles net earnings (loss) and net earnings (loss) per share, as per IFRS, with adjusted net earnings and adjusted net earnings per share:





(in millions of Canadian dollars, except amounts per share) (unaudited)

NET EARNINGS (LOSS)


NET EARNINGS (LOSS) PER SHARE 1


Q1 2020

Q4 2019

Q1 2019


Q1 2020

Q4 2019

Q1 2019









As per IFRS

22

(26)

24


$

0.24

$

(0.27)

$

0.26

Specific items:








Loss (gain) on acquisitions, disposals and others

1

5

(10)


$

0.01

$

0.04

$

(0.11)

Inventory adjustment resulting from business acquisition

2


$

0.02

Impairment charges

64

4


$

0.49

$

0.03

Restructuring costs

3

5


$

0.02

$

0.04

Unrealized loss (gain) on derivative financial instruments

(1)

2

(3)


$

(0.01)

$

0.01

$

(0.02)

Loss on repurchase of long-term debt

14


$

0.11

Unrealized gain on interest rate swaps and option fair value

(1)


$

(0.01)

Foreign exchange loss (gain) on long-term debt and financial instruments

17

1

(6)


$

0.18

$

0.01

$

(0.06)

Tax effect on specific items, other tax adjustments and attributable to non-controlling interest1

(35)

(1)


$

(0.12)


17

55

(11)


$

0.18

$

0.57

$

(0.12)

Adjusted

39

29

13


$

0.42

$

0.30

$

0.14


1 Specific amounts per share are calculated on an after-tax basis and are net of the portion attributable to non-controlling interests. Per share amounts in line item ''Tax effect on specific items, other tax adjustments and attributable to non-controlling interests'' only include the effect of tax adjustments.

The following table reconciles cash flow from operating activities with operating income and operating income before depreciation and amortization:





(in millions of Canadian dollars) (unaudited)

Q1 2020

Q4 2019

Q1 2019

Cash flow from operating activities

119

163

52

Changes in non-cash working capital components

34

(72)

30

Depreciation and amortization

(71)

(77)

(67)

Net income taxes paid (received)

(9)

13

Net financing expense paid

17

32

43

Premium paid on long-term debt repurchase

11

Gain (loss) on acquisitions, disposals and others

(1)

(5)

9

Impairment reversals and restructuring costs

(62)

(5)

Unrealized gain (loss) on derivative financial instruments

1

(2)

3

Dividend received, employee future benefits and others

(2)

7

Operating income (loss)

90

(1)

72

Depreciation and amortization

71

77

67

Operating income before depreciation and amortization

161

76

139

The following table reconciles cash flow from operating activities with cash flow from operating activities (excluding changes in non-cash working capital components) and adjusted cash flow from operating activities. It also reconciles adjusted cash flow from operating activities to adjusted free cash flow, which is also calculated on a per share basis:





(in millions of Canadian dollars, except amount per share or otherwise mentioned) (unaudited)

Q1 2020

Q4 2019

Q1 2019

Cash flow from operating activities

119

163

52

Changes in non-cash working capital components

34

(72)

30

Cash flow from operating activities (excluding changes in non-cash working capital components)

153

91

82

Specific items, net of current income taxes if applicable

16

3

Adjusted cash flow from operating activities

153

107

85

Capital expenditures & other assets1 and right-of-use assets payments, net of disposals

(84)

(80)

(76)

Dividends paid to the Corporation's Shareholders and to non-controlling interests

(10)

(11)

(8)

Adjusted free cash flow

59

16

1

Adjusted free cash flow per share

$

0.63

$

0.17

$

0.01

Weighted average basic number of shares outstanding

94,248,804

94,287,895

94,166,959


1 Excluding increase in investments

The following table reconciles total debt and net debt with the ratio of net debt to adjusted operating income before depreciation and amortization (adjusted OIBD): 





(in millions of Canadian dollars)

March 31, 2020

December 31, 2019

March 31, 2019

Long-term debt

2,264

2,022

1,904

Current portion of long-term debt

92

85

73

Bank loans and advances

9

11

18

Total debt

2,365

2,118

1,995

Less: Cash and cash equivalents

153

155

117

Net debt

2,212

1,963

1,878

Adjusted OIBD (last twelve months)

630

604

521

Net debt / Adjusted OIBD ratio

3.5x

3.25x

3.6x

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Cision View original content:http://www.prnewswire.com/news-releases/cascades-announces-a-continuation-of-solid-results-for-the-first-quarter-of-2020-301054326.html

SOURCE Cascades Inc.

Cision View original content: http://www.newswire.ca/en/releases/archive/May2020/07/c7988.html

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